LABOR ECONOMICS
LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 10, Problem 12P
To determine

Explain the conclusion based on the various union-negotiated effects.

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What is the principle strategy of an inclusive (industrial) union in order to increase the wages of its members?
Suppose the union’s resistance curve is summarized by the following data. The union’s initial wage demand is $10 per hour. If a strike occurs, the wage demands change as follows:Length of Strike:                    Hourly Wage Demanded1 month                                                 $92 months                                                 83 months                                                 74 months                                                 65 or more months                                  5Consider the following changes to the union resistance curve and state whether the proposed change makes a strike more likely to occur, and whether, if a strike occurs, it is a longer strike.a. The drop in the wage demand from $10 to $5 per hour occurs within the span of two months, as opposed to five months.b. The union is willing to moderate its wage demands further after the strike has lasted for six months. In particular, the wage demand keeps dropping to $4 in the sixth…
5. Exclusive, or craft, unions - Reducing labor supply Consider a small town economy with only two sectors: coal mining and logging. Both sectors are perfectly competitive, and workers are equally able and willing to work as miners (coal industry) and lumberjacks (logging). Only outside companies demand the coal and wood produced in the city, so changes in the domestic labor market do not affect the product demand curve in either sector. Suppose a union forms in the logging industry. The union limits its membership to less than the number of workers employed before the union formed and forces all employers in the industry to hire only union workers. Show the effect of unionization in the logging sector on the labor market for miners. Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move the curve and it snaps back to its original position, just try again and drag it a little farther. (? Labor supply Labor demand Labor supply Labor…
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